ABLE Accounts and Qualified Disability Expenses: How to Get it Right

ABLE accounts are a great tool for people with disabilities that is increasingly being used by families as part of their special needs plan for children with developmental disabilities. A lingering and persistent question for these families surrounds ABLE accounts and qualified disability expenses and what a qualified disability expense actually is.

Parent about to take notes on qualifying expenses to be paid from an ABLE account.

ABLE Accounts and Qualified Disability Expenses

To receive the protections and benefits of ABLE, the account can only be used to pay for Qualified Disability Expenses. An expense is “qualified” if:

  1. You incurred the expense at a time when you were considered an Eligible Individual (see “Eligibility” above);
  2. The expense relates to your disability.

The expense does not need to be “medically necessary” nor does it need to be for the sole benefit of the Eligible Individual.

Using the money in an ABLE account to purchse gifts for others is probably not related to the disability, but it’s not always easy to determine whether other types of expenses are allowed.

Social Security Administration Guidance

Each state program is charged with defining this term, and most states have developed very broad definitions that encompass most common uses for money in these accounts. However, we have some giudance from the social security administration. The following list is set out in social security guidelines for their examiners.

Qualified disability expenses (QDEs) are related to the blindness or disability of the designated beneficiary and for the benefit of the designated beneficiary. In general, a QDE includes, but is not limited to, an expense for:

  • •Education;
  • •Housing;
  • •Transportation;
  • •Employment training and support;
  • •Assistive technology and related services;
  • •Personal support services;
  • •Health;
  • •Prevention and wellness;
  • •Financial management and administrative services;
  • •Legal fees;
  • •Expenses for ABLE account oversight and monitoring;
  • •Funeral and burial; and,
  • •Basic living expenses (includes food)

Housing expenses detailed

The agency goes on to say that housing expenses include expenses for:

  • •Mortgage (including property insurance required by the mortgage holder);
  • •Real property taxes;
  • •Rent;
  • •Heating fuel;
  • •Gas;
  • •Electricity;
  • •Water;
  • •Sewer; and
  • •Garbage removal.

Why these things matter

Under federal law, the money in an ABLE account (up to the annual and lifetime maximums) is not considered when determining the eligibility of the account holder for SSI or medicaid benefits. However, even if the amount of money in the account meets the requirements, if the account is not used as intended then social security could determine that it no longer qualifies as a proper ABLE account, and would no longer be excluded from consideration for eligibility purposes. In less lawyerly language, this means if you don’t use the account the right way and spend money on the wrong things, you could lose the protection of the account.

How Do ABLE Accounts Fit Into the Larger Plan?

ABLE accounts are a valuable tool as part of your overall special needs plan for your child. They are useful for adults with disabilities who have the ability to manage and use money on their own, allowing them to save and spend without the restrictions otherwise imposed by SSI requirements.

But even for adults who are not able to handle their own money, these accounts provide a simple place to stash smaller cash windfalls, like the stimulus checks that arrived during the pandemic, or any gift from grandparents or others, as long as it is less than the yearly contribution limit. The accounts can also be used to supplement housing and food expenses without causing a reduction in SSI benefits.

A frequent question in the minds of parents is whether they should have an ABLE account or a special needs trust for their child. ABLE accounts are NOT a subsitute for a special needs trust. They serve different purposes and work in different ways. Some things you can do with a special needs trust cannot be done with an ABLE account, and some things an ABLE account can do a special needs trust cannot do.

Almost all families will need to create a special needs trust, but not all families will need an ABLE account – but many families will benefit from having both a special needs trust and an ABLE account. And depending on the situation, some families will need more than one special needs trust.

Who is eligible for an ABLE account?

ABLE accounts are a great tool for people with disabilities, but not everyone is eligible. A person of any age can open an account, but the disabling conidtion must have started before the age of 26. A parent can open an account for a minor, as long as there is a disability, or the disabled individual themselves can open an account once they turn 18. If the disabled individual is not able to handle their own affairs, a guardian or other person with authority can open the account on their behalf. Even disabled individuals over the age of 26 can open an account, as long as the disabliity began before age 26.

Disability can be established by indicating receipt of SSI or Medicaid benefits. If the individual is not receiving SSI at the time of opening the account, a medical statement of disability can be used to establish eligibility for the account.

Opening an account

ABLE accounts are authorized by federal law. Each state is responsible to create an ABLE program. Most state programs allow people from any state to open an account, so an individual can compare the features of different programs and choose the one that best fits their needs. The ABLE National Resource Center has a comparison tool for all the existing ABLE account programs, and links to each program that will provide information on opening an account. You don’t need an attorney to open an account, but the use of an ABLE account and how it fits into your overall special needs legal plan should be part of a consultation with a special needs law firm attorney.

Once you have an account, develop a method for keeping track of yearly contributions so that you don’t exceed the yearly limit. Make sure you provide information about contributing to the account to relatives who may give substantial gifts to your child, or who may want to make regular contributions for housing or other monthly costs.

Maintenance and closing an account

Individuals may have only one ABLE account. However, an existing account can be transferred to another state program if at some point a different program is a better fit. An existing 529 college savings plan for the disabled individual can also be rolled into an ABLE in some situations, if it’s determined that the individual will not be incurring college or other qualifying educational expenses. Unneeded 529 accounts can also be handled in a few other ways, but it is beyond the scope of this article to get into that.

At the end of the life of the account holder, any money remaining in the account may be claimed by a state Medicaid program that has paid benefits on behalf of the individual. If Medicaid does not make a claim, or if there is still additional money after the claim, that money will go either to the estate of the disabled individual, or according to a beneficiary designation made by the individual.

Parker Counsel Legal Services is a special needs law firm providing estate planning, special needs trusts, guardianship, and more to families with children who have developmental disabilities. Offices in Texas, Massachusetts, New Jersey. To see how we can help your family prepare for the future, schedule a short phone call here, or call 833-Red-BOOT (833-733-2668) or email at

Dive into ABLE accounts vs special needs trusts

We frequently get asked by families whether an ABLE account or a special needs trust is best for them.  The short answer is a typical lawyer answer: it depends.  The medium answer is that they serve different purposes and its not a matter of choosing one or the other, its about choosing the best vehicle for specific purposes, and in the end, most families should have both an ABLE and a special needs trust.

They both serve as a place where money can be accumulated for a person with a disability without interfering with eligibility for SSI and Medicaid benefits. Past that commonality, there are significant differences.


An ABLE account can be owned and even managed by the person with the disability, if they otherwise have the ability. The disabled individual can make his or her own decisions and use a debit card or checks to pay for items.

A special needs trust must be managed by a trustee, who makes all the decisions about investment and use of the money in the trust.  The person with the disability, or a guardian or caretaker, can propose expenditures from the trust, but the trustee makes the final decision and handles the purchase.


An ABLE account has both yearly and lifetime deposit limits, at least for purposes of excluding assets from consideration for SSI and Medicaid eligibility. Up to $15,000 per year (approximate, this amount is tied to an index so will vary slightly year to year) may be deposited without impacting SSI or Medicaid eligibility.  A maximum of $100,000 total can be held in the ABLE account without impacting SSI or Medicaid eligibility.  The yearly deposit limit is far below what a person might typically receive from a parent upon the parent’s death, when property, retirement accounts and life insurance are all figured in.  An ABLE account can hold only cash, as well, so if a child is left property other than cash it could not be shielded by the ABLE account.  Money can be contributed by any person.

A special needs trust has no limit on the amount that can be contributed to it at any time, nor a maximum value overall.  A special needs trust can also hold any type of property, including a house, car, or other non-cash assets (with the exception of a pooled trust, which is not discussed in this article).  Like the ABLE account, money can be contributed by any person, but if the disabled person will be a contributor then the trust itself must have some special provisions.

Number of accounts

A person may have only one ABLE account.  It is not possible to get around the contribution limits by opening multiple accounts, as only one account is legal permitted.

A person may have any number of special needs trusts naming them as beneficiary.  Each parent and each individual grandparent could set up their own special needs trust for a person if they so chose, giving them the ability to choose the trustee and terms of their own liking.

Read more on ABLE accounts and special needs trusts:

ABLE Account Q&A,

4 Things to know about ABLE Accounts,

How NOT to use special needs trust money,

Does your child need a special needs trust to get Medicaid?,

The basics of special needs trusts

A special needs law firm can help you figure out what you need for your child, and how to put all the planning pieces together.

Parker Counsel Legal Services is a special needs law firm providing estate planning, special needs trusts, guardianship, and more to families with children who have developmental disabilities. Offices in Texas, Massachusetts, New Jersey. To see how we can help your family prepare for the future, schedule a short phone call here, or call 833-Red-BOOT (833-733-2668) or email at

Myth vs Attorney

As a special needs parent myself, I regularly tell our clients that getting connected to parent support groups is almost a necessity to get through life with a special needs child. Traditional sources of parenting wisdom and tips, like grandparents, the mommy group at the playground, and even the many many many parenting books at Barnes and Noble simply aren’t going to have the information we need for our differently abled and differently developing children. Special needs parent groups are a lifesaver.

But there are certain types of information that should still come from professionals. I frequently see bits of info regarding benefits and legal issues passed around in these groups that is just plain wrong. Much of it is ultimately harmless, but a lot of things I see can actually result in the loss of benefits and opportunities if the information is taken as true.

For example, recently this myth has been making the rounds: that individuals with disablities can only open an ABLE account if they are receicving SSI benefits. This is not true. You do not have to be receiving benefits in order to qualify for an ABLE account. And this is only the latest in a string of myths I see passed around about programs and benefits for kids and adults with special needs.

[The ABLE National Resource Center has a webinar coming up this Thursday, June 20, to bust that and some other myths about ABLE accounts. ]

Just as you must go to a doctor for a reliable medical diagnosis, you must go to experts for other types of reliable information. An attorney who deals with special needs issues is one great source, and our office is always willing to answer questions – the easiest way to get a question to us is by email but you can also call and leave a message. We will get back to you. We are here to help as best we can.

Make sure you have accurate information about what help your child is entitled to and make sure you have accurate information about how to get those benefits.

Parker Counsel Legal Services provides estate planning, guardianship, special needs trusts, and other services to families who have children with developmental disabilities in Texas, Massachusetts, New Hampshire, and New Jersey. 833-RED-BOOT (833-733-2668) or schedule a short information call at calendly.

New Hampshire ABLE Accounts

If you have a child or young adult in your New Hampshire family with a disability, thinking about therapies and medical visits and educational life skills isn’t the only are you need to be thinking about. There are also financial concerns about how the child will meet housing and medical and other future needs.

The biggest financial necessity is Medicaid and social security benefits, but in order to get those and still have money from parents or other family members to supplement the small cash benefit from social security, careful planning is required. Special needs trusts, trustees, estate planning for family members, and guardianships or alternatives for those that need help are all required in order to maximize the resources available to provide your child with a good life. And now there is another tool that can work alongside the other planning tools – an ABLE Account.

ABLE accounts are available to anyone with a disability that began before the age of 26. The accounts allow up to $15,000 a year to be deposited with certain tax advantages, and without being considered a resource that will interfere with receiving medicaid and SSI. These accounts can also be managed and money can be spent from them by the individual with the disability directly, rather than by a trustee as with special needs trusts. This makes these accounts especially useful for individuals with physical but not cognitive disabilities who have money management skills.

You can view details of the New Hampshire program here, but New Hampshire families can open an ABLE account in any state.

Parker Counsel Legal Services assists families in New Hampshire in setting up special needs trusts, ABLE accounts, guardianships, and other planning needs for special needs family members. Find out how we can help you – call us at 833-RED-BOOT (833-733-2668).

Massachusetts ABLE Accounts

Photo by Alexander Mils on Unsplash

An ABLE account is a type of bank account available to people who have a disability that began prior to the age of 26. The account allows individuals to accumulate their own money in amounts that would otherwise make them ineligible to receive SSI and MassHealth (Medicaid) benefits. They can also manage and spend the money in the account themselves, if they are otherwise able to, something that is not possible with the use of a Special Needs Trust.

ABLE accounts are especially useful for individuals who have their own income through a job or other source, but the accounts can be useful for other reasons as well. They may even allow an indi individual or their family to spend money to supplement housing costs without causing a reduction in SSI benefits.

ABLE accounts do not replace the need for a special needs trust, as trusts are able to hold far more money than an ABLE account and are typically used to receive an inheritance or life insurance from a parent. Your attorney can help you figure out how to use ABLE accounts and special needs trusts to maximize the amount of resources available to care for your child throughout their life.

Families in Western Mass, or other areas of Massachusetts, can find details of the state ABLE account program here. However, an ABLE account can be opened in any state, regardless of where you live.

Parker Counsel Legal Services helps families in Massachusetts with special needs members to set up a plan to care for their family member to the end of their life, using estate planning, special needs trusts, guardianships or other assistance, and other tools. Call us at 833-RED-BOOT (833-733-2668) to see if we can help you.

New Jersey ABLE Accounts

People with developmental or other disabilities that began before they turned 26 years old can save money in special accounts known as ABLE accounts. These are a valuable tool for anyone who receives SSI and Medicaid, since it is the only way a person can save more than $2000 AND manage it themselves without losing SSI and Medicaid benefits they are otherwise entitled to.

ABLE accounts also provide some other neat benefits and in some situations can be used to increase the amount of SSI benefits paid. They can help families maximize the resources available to an adult child with special needs even if the child is not able to manage their own money. Used in conjunction with SSI benefits and a special needs trust, the ABLE account is proving to be far more beneficial than originally envisioned. Although not everyone can benefit from an ABLE account, it is worth talking with your attorney about to see if it can provide a little extra flexibiilty and resource for your disabled adult child. New Jersey residents can open an ABLE account in any state, but only one account is permitted per person.

Parker Counsel Legal Services provides legal consultation, along with estate planning, special needs trust preparation, and guardianship or alternatives to help parents prepare their adult disabled children for the future. For a short, free, phone call to duscuss your situation, give us a call at 833-RED-BOOT (833-733-2668) or email

4 Things to Know About ABLE Accounts

accountant-1794122_1280ABLE accounts are a relatively new tool that people with disabilities and their families have to use in planning for adulthood.  ABLE is an acronym for Achieving a Better Life Experience and the basic idea is that it allows the accumulation and spending of money in the name of the disabled person without causing the loss or reduction of SSI (social security) and medicaid benefits.  Before the ABLE accounts, this was not possible.

ABLE accounts do NOT replace the need for special needs trusts and other planning tools, but they do some very useful things for some circumstances.  Here are a few basic things you should know about ABLE Accounts:

  1. ABLE accounts are the ONLY way an individual can accumulate money in their own name and still receive all the SSI and Medicaid benefits they would otherwise be eligible for. However, there are limits to the amounts of money – currently up to $15,000 per year and $100,000 total can be accumulated without causing a benefits disruption.  The yearly amount may fluctuate from year to year.
  2. ABLE accounts are only available to individuals whose disability occurred prior to their 26th birthday.  This means all individuals with a developmental disability such as cerebral palsy, autism, or Down Syndrome are eligible, as well as individuals whose disability was the result of an accident or medical malpractice or illness, as long as it occurred prior to age 26.
  3. Funds in an ABLE account may be able to pay for some things without causing an SSI reduction that would occur if funds from a special needs trust or another source were used.  This means that even people who are not capable of handling an account themselves, may benefit from having one.  This is a benefit that should be discussed with your attorney to see if using an ABLE account in conjunction with other tools may be useful.  This also may be a benefit that future legislative changes could eliminate, so if you are using an ABLE account for this purpose you will need to keep a close eye on legal and regulatory changes.
  4. Any funds being held in an ABLE account that remain at the time of the individual’s death are subject to claim by Medicaid. It may still be a good idea to accumulate money, but in many cases it may be better to avoid using the ABLE account merely as a savings account because of the possibility of it eventually going to Medicaid rather than designated beneficiaries.

Not all states currently have ABLE accounts, but you do not have to open an account in the state in which you live.  You can find great information on the specifics of currently available accounts on the ABLE National Resource Center website.

For more information generally on planning for the future of a child with special needs, you can read our articles here and here, or call our office for a short, free consult.  You can reach us toll free at 833-RED-BOOT (833-733-2668).  We serve families in Texas, Massachusetts, New Jersey, and New Hampshire.